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Unavoidable?

Nick Robinson | 12:49 UK time, Tuesday, 22 June 2010

and, to make his point, he is flanked not by one but by two Liberal Democrats - Nick Clegg and Danny Alexander.

Budget 2010 three-shot

In fact, the prime minister is sitting next to him - but on the main shot used by the Commons, the Tory leader appears hidden.

Budget 2010 wide

The image of spending and benefit cuts being unveiled and VAT hiked by a Tory chancellor with two Lib Dems nodding in agreement will define politics for a long time to come.

Update 1258: Before the election, the Tories promised that 80% of the work of cutting the deficit would come from cutting spending and 20% from raising taxes.

In fact, the chancellor has announced that the figures are 77% to 23%.

That 3% is the impact of the coalition.

Update 1309: George Osborne has announced 拢11bn-worth of welfare cuts, affecting every person who receives benefits.

Cuts to child tax credits, to child benefit, which is frozen for three years and to housing benefit were anticipated; Mr Osborne has also announced plans to cut disability living allowance and to raise benefits, in line not with retail prices (the RPI) but, instead, with a lower figure, the so-called consumer prices index (CPI), saving him 拢6bn.

Update 1322: He said during the election that his plans didn't require it.

Today, though, with Nick Clegg - the man who warned that Mr Osborne's plans were a "Tory tax bombshell" - at his side, George Osborne announced a 2.5% increase in VAT.

I couldn't help noticing that when the chancellor declared that "the years of debt and spending make this unavoidable", his Lib Dem allies were no longer nodding or smiling but looking at their feet.

VAT rise

Update 1336: So this chancellor, like his predecessors, had a rabbit to remove from his Budget hat.

He ended his speech with a pledge to link pensions to earnings - or prices or by 2.5%, whichever is higher - and a 拢2bn supplement to tax credits for low-income families.

That, Lib Dems will no doubt point out, was the cost and, perhaps, the benefit of the coalition (see update at 1258 above).

Comments

  • Comment number 1.

    And your point is? You seem to be gradually starting the 'blame the Lib Dems' game already. Everyone knew there would be cuts with a Tory government, indeed, even a Lib Dem government.

  • Comment number 2.

    "the Tory leader appears hidden"

    Let's play Spot The Conservative Leader...

    He's sat next to Danny Alexander! What do I win?

    Vince Cable and Iain Duncan Smith could almost be father and son.

  • Comment number 3.

    Are where is the wrecker Gordon Brown in all this ?

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    The other impact of the budget is the end of the LibDems as a serious political force in the UK

  • Comment number 6.

    even with these cuts/tax the net increase of the national debt will be 拢500billion over the next 6 yeras, truely staggering

  • Comment number 7.

    I think the coalition has been fairly useful to the Tories, everybody knows that VAT would be going up no matter who got in, however they can now claim that having to find money for Lib Dem promises required them to bring in the increase.

    Under "their" spending plans it was not required but under the coalition spending plans it was.

  • Comment number 8.

    This comment has been referred for further consideration. Explain.

  • Comment number 9.

    Well at least we now know that the election was a waste of time and the un-elected mandarins at the Treasury are still running things.

    The proof is the fact that VAT will go up 4 months before people see any benefit from the personal allowance increase!

  • Comment number 10.

    Britain needs a complete reboot. Frankly I'd have liked to have seen the budget go a little further, but by and large the majority of what Osborne has cooked up seems eminently sensible. 20% VAT will make little if any difference to the individual consumer in real terms exept on the most expensive of purchases, and my guess would be most retailers/vendors will absorb the increase anyway. Deeper benefits cuts would have been nice, pumping the savings into back to work schemes for long-term unemployed and the ridiculously mollycoddled disability scroungers of which there are so many. Tax breaks for new-start technology companies would be a priority also - since Thatcher annihilated manufacturing in this country we've had little else to fill the void, and now is the time to look at radically restructuring our industrial standing in the global market. We need some sort of identity back.

  • Comment number 11.

    Understandable (but disappointing) that Cameron was cowering out of shot.

  • Comment number 12.

    will pensioners be getting an increase in their tax code

  • Comment number 13.

    5#

    The Liberals havent been a serious political force for over 80 years!

  • Comment number 14.

    Curious that the only thing in the whole budget that Nick noticed so far has been VAT.

    Compared to all the other changes, this is the ONE thing he notices.

    But of course, Nick is completely politically independant and doesnt have anyone pulling his journalistic strings, no, no.

    I had to say that because the moderators wouldnt let me commentate to the contrary!

  • Comment number 15.

    I notice HH used the "Reckless" word. Can't politicians be original at least? Is this going to be every politicians description for anything or one they don't like?

    Lets be serious no one is going to be happy but this is better than the path to disaster we were on....

    One can only hope the cuts will be with the spreadsheet wielders, auditors and clipboard merchants and not the actual front line workers....

  • Comment number 16.

    I don't really understand why people are attacking the Lib Dems stating that they were against a VAT rise, this isn't a Lib Dem government, it's a coalition government, that means compromise, that means there are good bits and bad bits from both of the parties, not all the pledges of one, or all the pledges of the other.

    The only thing I'm saddened by is that the cuts weren't deeper, what justification is there for allowing alcohol, particularly cider, to remain so cheap when we already know it's far too cheap. What justification is there for increasing public sector wage at the low end, without cutting it at the high end?

    Does anyone know if the public sector pay freeze means public sector workers wont even get their annual increments, or if it's just that they merely wont get a rise on top of those increments?

  • Comment number 17.

    overall, i thought this was a fair budget. Glad to see; landline tax abolished, cider increase removed, caps on housing benefit, the linking of pensions to the RPI and me removed from tax!

    Sad to see; increase of Vat although no suprise, and in reality it's not a killer. Will it be going up on heating?? no mention of the fuel de-escalator, the keeping of child benefit as a universal benefit.

    Very sad to hear no mention of funding for the Aiming High For Disabled Children Program. These children are the very most vunerable and the funding agreed in the last Labour parliament was a huge boost to both disabled children and their families.

    Overall though, i thought he done well.

  • Comment number 18.

    As a middle class and financially secure traditional tory I am surprised that more was not done to bring the welfare state back to a system which supports the really needy. Removal of child benefit and winter fuel for those who have income in excess of 30k per annum in the household. Also annoyed the Disability Allowance Medical only applies to new claimants, surely it is the existing claimants who most urgently need to be assessed. Generally pleasing to see a more caring Budget thanks to the compromised needed in Coalition. More could have been done to reduce the welfare state for the unneedy and thereby the massive administration costs of that.

  • Comment number 19.

    I must say I was rather surprised to hear our chancellor commit himself to eliminating the deficit during this parliament. I like the confidence.

  • Comment number 20.

    Understandable (but not disappointing) that the man who caused the deficit was cowering not just out of shot, but out of the Commons and nowhere to be seen.

  • Comment number 21.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 22.

    #11 sagamix
    Unworthy comment
    It meant GO was flanked on TV by two LD's - a deliberate message.

    HH's reply makes it impossible for the LD's to leave the Coalition and all but guarantees the Socialists will be obliterated at the next election - she was been a good Commons speaker in recent weeks.

  • Comment number 23.

    Well, we knew this was going to happen. Shame for us students who live on 10% of the UK poverty line - I've no idea where I'll find the money to pay for extra VAT when I have a weekly income of 拢15 after rent.

  • Comment number 24.

    # 11 - Sagamix wrote:

    Understandable (but disappointing) that Cameron was cowering out of shot.

    And just where was Gordon Brown, the architect of this terrible financial mess? Cowering away in Scotland no doubt. Might I remind you that it was his economic incompetence that made this budget necessary.

  • Comment number 25.

    Your view appears that the Libs dems have ideologically reversed with their support of this budget. Will ground force lib dem activists stand idly by as everything they stood for was torn to shreds in minutes by Osbourne?

    As someone who previously has had no interest in politics, I sense that Mr Osbourne has set the scene for his role of knight in shining armour in three years time with the middle to upper classes. He will be scorned to high heaven in working class regions around the UK.

    Why not cut away at the Defence budget, stop spending silly money contributing to the killing and brutalising upon foreign fields?

  • Comment number 26.

    Radical? Not really. Some big changes compared with previous budgets, to be sure, but I think this was a missed opportunity. Here was a once-in-a-generation chance to be really radical and have a much-needed major rethink of the role of the public sector in the economy. Maybe I'll be proved wrong when we learn more about the details, but it seems to me that they haven't taken that chance. Instead, we see a bit of tinkering around the edges.

    It's all probably going in more or less the right direction, but it's a shame it couldn't have gone a lot further.

  • Comment number 27.

    #10 says "since Thatcher annihilated manufacturing in this country we've had little else to fill the void, ...."

    The truth is that in 1979 a lot of our manufacturing industry was inefficient, unproductive and compared to our competitors, a joke. The Thatcher government took the decision not to prop it up and yes some of it did go. During the Conservative government manufacturing contracted by 11%. However what survived was efficient and this is what Labour inherited. During the Labour government manufacturing contracted by a further 23% - so placing the blame on Thatcher is disingenuous.

  • Comment number 28.

    Oh well. Time to wait for the organised rebuttal unit soundbites and the afternoon moderators tea break.

    Might see some more contributions being cleared by what, 5pm?

  • Comment number 29.

    It is the sickest and most vulnerable people in our society who claim Disability Living Allowance(DLA) and Housing Benifit which are the two benifits this coalition government are targeting.In my experience the majority of people who are entitled to benifits don't claim half of what they are entitled to anyway and its a myth(bandied about by right wingers) that we live in a society of 'scoungers' who 'abuse the system'. I think that this government are going after 'easy targets' to sort out the deficit and I am absolutely disgusted by this budget. In the meantime I will be very interested in this 'levy' that they are bringing in against the banks who created this mess in the first place. I notice that the details on this are not at all clear at the moment. I think that if they were serious about penalising the banks the money that would be raised should be in proportion to the profits raised and should be much greater than 拢2 billion particularly in light of the fact that trillions of pounds are gambled with impunity on the stock exchange.

  • Comment number 30.

    "WunnyBabbit wrote:
    Understandable (but not disappointing) that the man who caused the deficit was cowering not just out of shot, but out of the Commons and nowhere to be seen."

    That's unfair money-making diaries don't write themselves, and if he is writing them on OUR time wouldn't that mean that the IP would belong to the country - after all that is the way it is in the corporate world.

  • Comment number 31.

    So much for the vain attempts by the Lib Dems to modernise the Conservative Party!! Osborne calls it progressive - well it is to a certain point as being brutally honest. Remember when the Tories said that unfunded tax cuts made up from efficiency savings were the oldest trick in the book. Today, raising VAT was just the first rabbit to come out of the hat and will punish the poor, pensioners and unemployed. Aside from jobs losses, cuts to public services will ultimately effect those people who use them the most.

  • Comment number 32.

    I know that there will be some people who would say get a job but it has been hard to find with health condition I have. I would like to know how this budget will effect me I claim JSA and housing benefit I only have one bedroom. Hope someone can help

  • Comment number 33.

    23. At 2:00pm on 22 Jun 2010, dandelionblue wrote:
    Well, we knew this was going to happen. Shame for us students who live on 10% of the UK poverty line - I've no idea where I'll find the money to pay for extra VAT when I have a weekly income of 拢15 after rent.

    ------------------------------------------------------------------
    If you spend all your 拢15 before today you have nothing left. If you spend all your 拢15 in January 2011 you'll have nothing left.

  • Comment number 34.

    11. At 1:38pm on 22 Jun 2010, sagamix wrote:
    Understandable (but disappointing) that Cameron was cowering out of shot.

    Maybe, saga, or...

    Understandable (but disappointing) that 91热爆 cameramen chose that camera angle.

    I had the box on, but listened on the radio most of the time, as it let's you get on with things around the place. (Even writing other stuff while all the Westminster stuff bumps against the ear drum.)

    Funny thing is, that on the radio I couldn't spot Clegg or Alexander... Or Gordon Brown for that matter.

    And certainly I only had to listen to Ed Balls rather than watch him.

    I guess we will never know where the Brown/Darling/Balls et al combo would have laid their planned 44BIL axe on the economy. Didn't even mention the ego-centric Byrne bloke who admitted that there was "no money left"...
    Although, surely there must have been some plans even on the back of a fag- (oh, no) canapes napkin, rather good Bordeaux bottle label... Anywhere?

    Or were all those "plans" to cut the deficit in half just idle dreams? Can't have been.

    Surely, under the Freedom of Information Act, somebody can obtain access to the Treasury documents that must have been developed to allow Darling to tell the electorate that he would make major cuts - dramatic cuts- to reduce the deficit.
    Or was that all just made up?
    Can't have been.
    Can it?

    Can't have been like that "No more bust or boom" stuff, could it?

    So tell us what a Labour government planned to do to reduce their deficit and even a floating voter may offer some respect. Isn't that what political, economics and business editors on the 91热爆 should be digging away at?

  • Comment number 35.

    1. At 1:01pm on 22 Jun 2010, Pete wrote:
    And your point is? You seem to be gradually starting the 'blame the Lib Dems' game already. Everyone knew there would be cuts with a Tory government, indeed, even a Lib Dem government.
    --------------------------------------------------
    There were going to be cuts if Labour had won the election. As Osborne pointed out, they hadn't worked out what and how much to cut. That would explain their woeful performance over the last six months.

    If GO hadn't increased VAT, the Harridan would not have had much to complain about. There is a chance that Labour will overdo the complaints about VAT and bore the country into an intense dislike of Labour, even among their own supporters.

  • Comment number 36.

    32#

    Does your health condition stop you from getting work? If so, you have a genuine case under what used to be Incapacity benefit. Unless you're spending more than 400 a week on Housing benefit, you shouldnt have a problem.

    Theres no reason why those in genuine need should end up being penalised.

  • Comment number 37.

    It is the sickest and most vulnerable people in our society who claim Disability Living Allowance(DLA) and Housing Benifit which are the two benifits this coalition government are targeting.In my experience the majority of people who are entitled to benifits don't claim half of what they are entitled to anyway and its a myth(bandied about by right wingers) that we live in a society of 'scoungers' who 'abuse the system'.
    ----------------------------------------------------------------------

    and your experience is, what precisely???

    (sound of tumbleweed blowing in the breeze)

    Housing benefit ONLY affecting those claiming more than 400 quid a week.

    If you can spend 1600 quid a month on rent, you're not poor. Thats more than my mortgage. You've just got far too many brats that you cant afford. In all but the capital 1600 quid a month will get you a damn good roof over your head.

    AND the specified change to DLA is only to NEW applicants, not existing ones. So, those already in genuine need are hardly going to be getting ripped off there, are they?

    Try again.

  • Comment number 38.

    Who pays a bill without analyzing the bill to make sure that is correct & proper?
    When you come right down to it, all these austerity budgets are about two things:
    1. Paying down the sovereign debt and
    2. servicing the sovereign debt.
    No where have I seen, nor can I find, an analysis of the sovereign debt that affirms with good accounting principles that the sovereign debt is correct and proper. Does that not beg the question:
    Should the sovereign debt be repaid or serviced?
    It鈥檚 clear (at least to me) that the European sovereign debt crisis (including the United Kingdom) is a reflection of what happened to the States and their big banks in 2008. Almost all of Europe, in the process of international trading, got exposed to bundled derivatives, CDOs, credit default swaps and various other extremely risky financial instruments. It is even clear to me that some of this nerfarious activity was done with intent i.e. greed.
    The sovereign debt crisis is not limited to Greece or to the STUPID PIGS (Turkey, the United Kingdom, Dubai, Portugal, Italy, Greece, Spain); it is worldwide. The US agreed to pay billions to the IMF (International Monetary Fund) to 鈥渟upport鈥 this chaos (as in, Let's lend to "help".)
    This is ming-boggling:
    The United States
    - trillion dollars in debt
    - annual deficit of $1 trillion,
    should help fund the IMF with over $100B so reckless spending nations could get some relief.
    Okay, here are the questions:
    Where is the United States getting the money to finance the IMF? Well鈥t simply prints it, effectively reducing the value of the dollar.
    Why is it doing this? I won鈥檛 write the answer to this because it could lead to moderator to reject this article due to defamation.
    And the real big question is this:
    Are soverign debts legitimate?
    First of all you need to take them apart, analyse them, and make sure they are not riddled with bundled derivatives, CDOs, negative betting against soverign debt, etc. etc. etc.
    Get the legal beagles sniffing out illegal or dubious trading. Isolate these debts for potential legal action, or at least renegotiation with the so-called holder of the debt.
    In 2001, Anne Krueger of the IMF proposed a Sovereign Debt Restructuring Mechanism (SDRM) where a majority of creditors would vote to negotiate new terms under a restructuring agreement. The process needs an arbitrator, determining debt sustainability levels, judging debtors鈥 economic policies, and thus determining the necessary reduction of debt claims. The arbitor must not be the IMF - the IMF would essentially be arbitrating itself.
    Sovereign nations cannot liquidate, but Chapter 9 (bankruptcy) model provides debtor protection by resolving the conflict between the legal rights of creditors and the recognised human rights that a debtor country must fulfil towards its citizens. Consequently, services vital to essential public services such as health and education must be taken into consideration when moderating debt disputes.
    Up until now the call for an orderly sovereign-debt procedure has been relegated to the fringes of financial debate, where it has lain gathering dust. We need to pick up, shake it off, and pay attention. What the current financial crisis has revealed is that all countries are susceptible to the dangers of debt non-sustainability.
    I can never forget the statement out of the mouth of Tim Geithner, which went somewhat like this: derivatives are complex debts, calling for complex minds, and bright peoiple should recognize them for what they are. Does Tim鈥檚 statement not suggest that there was something not quite right about these complex debts calling for complex minds?
    There is no better time to establish a systematic procedure for sovereign debt alanysis to separate
    - legitimate debt
    - questionable debt (to be pursued by the legal experts) and
    - outright bad debt arising from illegal financial transactions.
    If you ask me, and you haven鈥檛, this ought to be top priority before we go around figuring out ways to repay sovereign debt, don't you think?

  • Comment number 39.

    30. At 2:21pm on 22 Jun 2010, Mark_WE wrote:
    "WunnyBabbit wrote:
    Understandable (but not disappointing) that the man who caused the deficit was cowering not just out of shot, but out of the Commons and nowhere to be seen."
    That's unfair money-making diaries don't write themselves, and if he is writing them on OUR time wouldn't that mean that the IP would belong to the country - after all that is the way it is in the corporate world.

    Mark,

    That's a fair comment. Companies I worked with had rules that said if you write about anything that relates to your employed activities (just as PM's diaries and other apparatchiks' life stories do) they have a right to etain the IPR.
    I worked out that I could write poems aimed at a childrens' market...

    I never worked out how Brown could write his "Courage" flop when he said he was delivering 20+ hours a day to advance the cause of the UK.

    Mind you, if you read the book it becomes fairly evident that it was almost as much of a crock as his approach to national economics. Seems he was engaged in stuff about which he had little knowledge and even less empathy.

    I believe that Dusty had a hit before Cher with that rather raunchy song about "The only man who turned me on was the son of a preacher man". It just seems sad to me that so many people could be dragged down that "Trust me, I'm the best hope you've got" nonsense, as the guy in the big top went around and pinched everybody's credit card...

    And the sad thing is that most of the "poor folk" he thought he could help by using other people's credit were not at all grateful. Just assumed that it was the role of the State to provide, whether or not they made an individual effort.

    I don't like writing that sort of stuff, saga.

    But you can't bring yourself to do it.

  • Comment number 40.

    33. At 2:49pm on 22 Jun 2010, Up2snuff wrote:

    "23. At 2:00pm on 22 Jun 2010, dandelionblue wrote:
    Well, we knew this was going to happen. Shame for us students who live on 10% of the UK poverty line - I've no idea where I'll find the money to pay for extra VAT when I have a weekly income of 拢15 after rent.

    ------------------------------------------------------------------
    If you spend all your 拢15 before today you have nothing left. If you spend all your 拢15 in January 2011 you'll have nothing left."

    But you will also have 2.5% less stuff for your money. That means 2.5% less toothpaste, soap, sunscreen. But they are "luxury" items, aren't they?

  • Comment number 41.

    #31 "raising VAT... will punish the poor, pensioners and unemployed"

    Don't follow that. The groups you have pinpointed are those that spend a high proportion of their disposable income on zero-rated goods (such as non-luxury foods), which will be unaffected. It *will* push up the price of confectionery and snacking foods such as crisps, but then all political parties have been moaning that something needs to be done about these, so no real surprise there. And sure, it's going to mean an increase of 拢25 in the cost of a 50-inch TV currently costing 拢1,000 鈥 but that is not going to impact *poor* people in the slightest!

  • Comment number 42.

    The reality is that although the Tories will kick the working class and poor as hard has they can there is only so much they can do.

    We hear repeatedly that there are 7 million economically inactive people of working age, 2.5 million unemployed, of them 1.5 million claim JSA and associated benefits, of the other 4.5 million EA's a big wedge claim other benefits such as DLA, but the real elephant at the table is there is no jobs for them to fill even if we got them all off benefits.

    By reducing demand from the public sector be that jobs, public contracts or the simple fact that public sector workers spend their wages in the private sector, you will actually see even more spare capacity in the private sector and who knows another 1-2million unemployed.
    By the time the cuts have hit home we will have 10 million economically inactive with 5 million unemployed.

    Tories like John Redwood who I may not have much in common with do at least come clean, the Tories accept high unemployment and sending the poor to the wall as a necessary prerequisite to a low tax economy.

    For low tax economy read social vandalism.

    The reality is those willing to work will be hit hardest, take the Tory philosophy to its natural conclusion and the NHS will be gone within 10 years, basic healthcare for the poor and the rest of us pay through the nose for private health care.

    I wonder if there are any Lib Dems with a conscience who regret voting for Clegg and his gang of 鈥渃ollaborators鈥.

  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 44.

    11. At 1:38pm on 22 Jun 2010, sagamix wrote:
    Understandable (but disappointing) that Cameron was cowering out of shot.

    You need to update that old black and white 'set' and the 'radiogram'

  • Comment number 45.

    Hearing Harriet Harman attack George Osborne, is like hearing an arsonist attacking the Fire Service!!

  • Comment number 46.

    23. At 2:00pm on 22 Jun 2010, dandelionblue wrote:
    Well, we knew this was going to happen. Shame for us students who live on 10% of the UK poverty line - I've no idea where I'll find the money to pay for extra VAT when I have a weekly income of 拢15 after rent.

    Well, if you only have 拢15 to spend, it must go on food, which is VAT free, so no problem

    So what are you saying then?

  • Comment number 47.

    29. At 2:21pm on 22 Jun 2010, hels5 wrote:
    It is the sickest and most vulnerable people in our society who claim Disability Living Allowance(DLA) and Housing Benifit which are the two benifits this coalition government are targeting.In my experience the majority of people who are entitled to benifits don't claim half of what they are entitled to anyway and its a myth(bandied about by right wingers) that we live in a society of 'scoungers' who 'abuse the system'. I think that this government are going after 'easy targets' to sort out the deficit and I am absolutely disgusted by this budget. In the meantime I will be very interested in this 'levy' that they are bringing in against the banks who created this mess in the first place. I notice that the details on this are not at all clear at the moment. I think that if they were serious about penalising the banks the money that would be raised should be in proportion to the profits raised and should be much greater than 拢2 billion particularly in light of the fact that trillions of pounds are gambled with impunity on the stock exchange.


    Unfortunately you decline to consider reality. It is precisely because those who ARE in need and ARE vulnerable, that we need to ensure that those in receipt of DLA and Housing benefit are protected, and most importantly are genuine claimants

    How can you argue against this?

    Unless you wish to ensure that those claiming who are not genuine claimants should get a freebie?

    Please can you explain to me how the banks are responsible for Gordon Brown overspending between 2002 and 2010?

    Also, where is he?

    Still drawing an MPs salary...nowwere to be seen

  • Comment number 48.

    41. At 3:24pm on 22 Jun 2010, fatfox wrote:

    "#31 "raising VAT... will punish the poor, pensioners and unemployed"

    Don't follow that. The groups you have pinpointed are those that spend a high proportion of their disposable income on zero-rated goods (such as non-luxury foods), which will be unaffected. It *will* push up the price of confectionery and snacking foods such as crisps, but then all political parties have been moaning that something needs to be done about these, so no real surprise there. And sure, it's going to mean an increase of 拢25 in the cost of a 50-inch TV currently costing 拢1,000 鈥 but that is not going to impact *poor* people in the slightest! "


    It will also have a knock-on impact on essential items. The cost of fuel will rise, so the cost of transporting essential items to shops will increase. The cost of running a car will increase, but again really poor people are more likely to use public transport. But public transport also relies on fuel, which will again be subject to this rise and then costs of using public transport will go up.

    The only way to ensure that it didn't hit the poorest would be to combine it will a 2.5p reduction in fuel duty.

  • Comment number 49.


    VAT....not increased until the 15% to 17.5% rise is out of the inflation snake...(as I hoped)

    Public sector pay freeze...2 years...those below 拢21K given a rise (as I hoped)

    Child benefit frozen....to means test would cost more than it saved..COMMON SENSE and fairness, showing that this Chancellor is a classy and fair operator

    Capital allowance for business...fairness..to BUSINESS

    Corporation Tax reforms...Fair, sensible, and gradual reduction in the taxation on business, encouraging companies to invest, as they can plan ahead

    Housing benefit...reform...DLA...reform...TO STOP OUR TAX BEING WASTED

    Ending children's tax credits for those earning more than 拢40K..sensible and fair, and about timw


    WELL DONE GEORGE

  • Comment number 50.

    46. At 3:59pm on 22 Jun 2010, Kevinb wrote:

    "Well, if you only have 拢15 to spend, it must go on food, which is VAT free, so no problem

    So what are you saying then?"


    With rises in VAT food will increase in price. Unless you think that Tescos are going to absorb the increased cost of transporting goods to their shops.

  • Comment number 51.

    fairly @ 39

    "And the sad thing is that most of the "poor folk" he thought he could help by using other people's credit were not at all grateful. Just assumed that it was the role of the State to provide, whether or not they made an individual effort."

    I will add "mass mind reader" to the long (and getting longer) list of your attributes.

  • Comment number 52.

    50. At 4:33pm on 22 Jun 2010, toni49 wrote:

    With rises in VAT food will increase in price. Unless you think that Tescos are going to absorb the increased cost of transporting goods to their shops.

    ------------------------------------------
    Transport costs are a small part of the shelf price of goods. 2.5% of that is diddly squat. Plus you need to take the following into account:
    - Tesco price point their products - so an increase in cost of getting the non-vatable product to the store of, lets say 1% (and that is exagerating the impact) will not force them to increase the selling price.
    - Have you seen the currency markets today? The pound has risen on the back of the budget and as the markets see that the government is serious about tackling the deficit the pound will stay firm (unlike the last 2 years of Labour when it has been in freefall). That means petrol, the price of which is heavily influenced by the exchange rate and which takes up a significant part of the transport costs will be cheaper to buy so, other things being equal, it will more than offset any increase in input cost.

  • Comment number 53.

    50

    When did it become compulsory to shop at Tescos?

  • Comment number 54.

    40. At 3:20pm on 22 Jun 2010, toni49 wrote:
    33. At 2:49pm on 22 Jun 2010, Up2snuff wrote:

    "23. At 2:00pm on 22 Jun 2010, dandelionblue wrote:
    Well, we knew this was going to happen. Shame for us students who live on 10% of the UK poverty line - I've no idea where I'll find the money to pay for extra VAT when I have a weekly income of 拢15 after rent.

    ------------------------------------------------------------------
    If you spend all your 拢15 before today you have nothing left. If you spend all your 拢15 in January 2011 you'll have nothing left."

    But you will also have 2.5% less stuff for your money. That means 2.5% less toothpaste, soap, sunscreen. But they are "luxury" items, aren't they?
    =================================================================

    The sunscreen might might be a luxury item. While I am not totally unsympathetic to your plight, have you calculated the difference on spending 拢15 with 17.5% VAT and spending 拢15 with 20% VAT? As they say, 'Do the math'.

  • Comment number 55.

    42. At 3:28pm on 22 Jun 2010, bluedefence wrote:
    The reality is that although the Tories will kick the working class and poor as hard has they can there is only so much they can do.

    We hear repeatedly that there are 7 million economically inactive people of working age, 2.5 million unemployed, of them 1.5 million claim JSA and associated benefits, of the other 4.5 million EA's a big wedge claim other benefits such as DLA, but the real elephant at the table is there is no jobs for them to fill even if we got them all off benefits.

    -----------------------------------------------------------------

    Unless your posting name indicates your political allegiance and you are using heavy duty irony in this post, I read it as your having a good memory for statistics but a somewhat fallible one when it comes to the events of history.

    The General Election was in May - 2010 - just over a month ago. The previous Government was a Labour Government. The statistics you list are the responsibility of the previous Government.

    ' wonder if there are any Lib Dems with a conscience who regret voting for Clegg and his gang of 鈥渃ollaborators鈥.'
    ---------------------------------------------
    I have a conscience. No. No regrets.

  • Comment number 56.

    55

    Actually 8.19M economically inactive

  • Comment number 57.

    54

    It is 32p in case you are not a mathematics student

  • Comment number 58.

    IF THIS WAS SUPPOSED TO BE A FAIR BUDGET, WHY IS DLA TO BE CUT? (YES I'LL UNDERGO A MEDICAL TOMMOROW BEFORE YOU START) I'M NOT STARVING TO DEATH, BUT GETTING BY IS NOT EASY, EVERYBODY SEEMS TO THINK WE'RE GETTING FREEBIES, BUT I PAID INTO THE SYSTEM FOR 40YRS TO COVER ME FOR A SITUATION LIKE MINE, WHERE A SERIOUS HEALTH PROBLEM FORCED ME TO FINISH WORKING. I HAVEN'T EVEN GOT A SOCIAL LIFE ANYMORE DUE TO THE FACT I CAN'T GET OUT. WHY NOT INCREASE TAXES ON CIGARETTES + DRINK, WHICH IS COSTING OUR NHS A FORTUNE, OR STOP CHILD BENEFIT FOR THOSE EARNING OVER 拢30K NOT 拢40K. I'M SORRY BUT I CAN'T REALLY SEE WHO, OTHER THAN THOSE ON A LOW INCOME ARE GOING TO SUFFER THIS "PAIN" ONE CUT I WOULD APPLAUD ARE N.OSBOURNES' B***S

  • Comment number 59.

    Dear Funbar

    I have worked on the frontlines of the NHS and social services for more than 20 years directly aiding and assisting the most vulnerable in our society so that in a nutshell is my experience. I have borne witness to the abject poverty and extreme neglect that a layer of our society in this developed country have to endure under the current benifit rules which now seem generous under these new rules!

    You're wrong about the new rules for DLA only applying for new claimants and all claimants on sickness benfits of any kind are going to be subject to even more rigorous scrutiny than they are forced to endure already. Also many people will now have to endure homelesness as I'm sure landlords won't reduce their extortionate rents in the face of the cap on housing benifit.

    As for your comments about 'too many brats'....well I won't even bother to respond to that!!

    As for you Kevin B:

    I assure you that I experience 'reality' every day(see above) and I can see beyond my own self interest and show a bit of compassion for others who will experience the harshest end of these cuts ie the sick and the poor.

    The banking crisis is a global phenomenon and was not brought about by Labour!! Now that the banks are again making profits and overpaying their 'very talented' personel(dispatches channel 4 last week) perhaps a percentage of the profits could plug the deficit. The proposed levy is wholly inadequate and unfair.

    I also think that cutting housing benifit for people who have been claiming income support for a year to 'motivate people' to get back into a job that probably doesn't exist anyway is just plain ridiculous!!

  • Comment number 60.

    58

    Hi Bazza

    It ISN'T being cut. We had this conversation before, by the way, if you remember

    ALL claimants of DLA will need to undergo a medical, to ensure that the money is reaching those that have genuine claims

    As you have nothing to worry about, then don't!!!

  • Comment number 61.

    59

    Helsbells wrote

    As for you Kevin B:

    I assure you that I experience 'reality' every day(see above) and I can see beyond my own self interest and show a bit of compassion for others who will experience the harshest end of these cuts ie the sick and the poor.

    The banking crisis is a global phenomenon and was not brought about by Labour!! Now that the banks are again making profits and overpaying their 'very talented' personel(dispatches channel 4 last week) perhaps a percentage of the profits could plug the deficit. The proposed levy is wholly inadequate and unfair.

    I also think that cutting housing benifit for people who have been claiming income support for a year to 'motivate people' to get back into a job that probably doesn't exist anyway is just plain ridiculous!!

    Actually, if you take your victim goggles off, you might notice that the budget PROTECTS those on the lowest incomes

    Brown spent more than he had coming in between 2002 and 2010 and IS to blame for much of the current mess

    He is not even man enough to turn up at his place of work

    Housing benefit is being capped, and quite rightly too, to ensure that we (that would be the taxpayers) are not being ripped off

    I would have thought you could see the sense in that...however.....

    It has NOTHING to do with motivating people back into work, it is about stopping the flow of taxation out of the front door as if it grew on trees

    Anyone who really cares about the poor would see that this is essential

    I will take no lessons on helping the poor from a supporter of the previous government, as without their incompetence, we would not need to take this draconian action now

    Incidentally, Draconian is named after the governor of Athens, Draco, and if we do not get our house in order we WILL end up with the IMF here, and austerity cuts imposed by the IMF

    People like you are quite happy to knock the banks, yet they provided something like 36% of tax receipts for several years which that buffoon Brown was quite happy to boast about

    If you had any compassion you would realise that we need to resolve the mess left behind by Brown in this parliament, and then the country will prosper once more

  • Comment number 62.

    57. At 7:14pm on 22 Jun 2010, Kevinb wrote:
    54

    It is 32p in case you are not a mathematics student

    -----------------------------------------------------
    Oops, Kevinb, you've let me down! Did you borrow a calculator from the 91热爆 R4 Dept by any chance? They quite often get the currency closing figures for the 鈧 wrong in PM and the 6 O'clock News.

  • Comment number 63.

    15. At 1:46pm on 22 Jun 2010, realistik wrote:
    I notice HH used the "Reckless" word. Can't politicians be original at least? Is this going to be every politicians description for anything or one they don't like?

    ----------------------------------------------------
    Ah, but she had the advantage on us males. She saw Prudence - probably in the HoC Restrooms - and under her sober clothes and apparent dowdiness, she was a right little raver and spendthrift. We didn't get to see her in her true colours until she came home after thirteen years hard partying. That's why the Harridan now thinks anything is reckless these days.

  • Comment number 64.

    59. At 7:42pm on 22 Jun 2010, hels5 wrote:

    Dear Funbar

    I have worked on the frontlines of the NHS and social services for more than 20 years directly aiding and assisting the most vulnerable in our society so that in a nutshell is my experience. I have borne witness to the abject poverty and extreme neglect that a layer of our society in this developed country have to endure under the current benifit rules which now seem generous under these new rules!

    You're wrong about the new rules for DLA only applying for new claimants and all claimants on sickness benfits of any kind are going to be subject to even more rigorous scrutiny than they are forced to endure already. Also many people will now have to endure homelesness as I'm sure landlords won't reduce their extortionate rents in the face of the cap on housing benifit.

    As for your comments about 'too many brats'....well I won't even bother to respond to that!!
    ---------------------------------------------------------------------

    Think about it a little while, hels. Landlords would rather have a property with someone in it paying SOME rent, rather than it being empty at a higher price and gaining NO income from it. Now, before you go off on one, I have no time for amateur landlords or the buy to let sector in general anyway - I hold them and the lenders responsible for choking the first time buyers out of the market and driving up the costs of entry level properties. I dont think this particular budget has done them any favours and it (in my humble opinion) is long overdue.

    My understanding from yesterdays budget speech is that the more rigorous measures are for new applicants. Thats how it was widely reported, unless the 91热爆 are lying.

    And as I said before, possibly in another thread, regardless of the rights or wrongs of this budget, there are many things that we cannot afford to sustain at current levels. The decision either gets made by our elected leaders, or the IMF comes in and does it for us. Regardless of who we may individually blame for getting us to this point, this point is where we are. And we cannot stay there. There is no such thing as a magic money tree, plain and simple.

  • Comment number 65.

    BLACK TUESDAY FOR THE PROPERTY MARKET:
    The budget failed to address the stamp duty levy at 拢250k where the levy jumps from 1% to 3%, as such this is stopping houses from rising and pulling prices that should be over the 拢250k level to offers lower. The FTB exemption upto 拢250k only works if the FTB is not with a partner who has brought before, quite unlikely with the average FTB at 37 years old. A FTB incentive should have been introduced to help FTBs raise their deposit to release upward chains, for which those upward in the chains stamp duty would pay for such a scheme, but NO. The government suspended HIPs which was a great move, but with lenders slow to lend agents are reporting street price wars where the lowest price will sell. With almost a 1/3rd post HIP homes additionally on the market, prices may be driven down as low as 10-15% further this year. We may see a return of repossessions as lending gets even tighter based on less equity in homes. This was a VERY POOR budget. To restart the housing market would create more work and release mortgage funding from those downsizing which could then be reallocated to thos wanting to upsize or borrow more.
    Trevor Mealham INEA (The Independent network of Estate Agents)

  • Comment number 66.

    Interesting points Trev....

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